Understanding Financial Statements, Cash Flows and Taxes (excel)

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Module 2 Critical Thinking Assignment:

Understanding Financial Statements, Cash Flows and Taxes

*Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit, no hard keys.

Problem 2-1: Preparing Financial Statements

Information below is for Morris Manufacturing, Inc. for the year ended December 31, 20x1 except where beginning of year numbers indicated. All amounts in SAR unless otherwise stated.

Using the information below:

1. Prepare an income statement with the proper title

2. Prepare end of year balance sheet with the proper title

3. Calculate net working capital

4. Calculate the debt ratio

*Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit, no hard keys.

Sales

550,000

Accumulated Depreciation

190,000

Cash

119,500

Cost of Goods Sold

320,000

Accounts Receivable

73,000

Depreciation Expenses

38,000

Accounts Payable

65,000

Interest Expense

26,000

Short-Term Notes Payable

29,000

Income Taxes

59,850

Inventories

47,000

Marketing, General & Admin Expenses

45,000

Gross Fixed Assets

648,000

Long-Term Debt

360,000

Common Stock

120,000

Other Assets

15,000

Retained Earnings

138,500

Common Stock Shares Outstanding

10,000

Common Stock Dividends Paid

15,000

Problem 2-2 Preparing Statement of Cash Flows

Given the following information, prepare a statement of cash flows.

Financial Information

Increase in accounts receivable

25

Increase in inventories

30

Operating Income

75

Interest Expense

25

Increase in accounts payable

25

Dividends

15

Increase in common stock

20

Increase in net fixed assets

23

Depreciation Expense

12

Income taxes

17

Beginning cash

20